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Sales Performance Management (SPM) involves multiple business processes, and hence, the procurement and implementation of an SPM Tool (such as Callidus, IBM, Xactly) requires a significant amount of planning and effort.

The planning must start long before you schedule vendors demos. There is no point in conducting vendor demos if your organization is not yet prepared to travel the road towards SPM automation. So how do you go about evaluating your preparedness?

To determine your organization’s readiness for an SPM tool, here are the top 10 questions you should answer:

1. What is the Business Justification?

The answer could be Cost Savings, Enhanced Reporting, Operational Efficiencies, Auditability, Calculating Payments or something related. Whatever it may be, if you can’t come up with a couple of strong business justifications, you will find it difficult to make a business case for the tool. Although it doesn’t all have to be about the financials, you have to be ready with a worksheet that shows the numbers. To learn how to build a business case, here is a link to a webinar that could be very helpful to you: http://bit.ly/2pvd1Ts.

2. Are the Executives on board?

Have you discussed your plans with your executives? Do they understand the high level budgetary needs for such a project? Do you have their verbal nod for a ballpark budget?

If your executives aren’t okay with the estimated budgets, maybe you have gotten ahead of yourself. Save yourself some time and initiate the vendor demos only after you see your executives warming up to the idea.

3. Are Compensation Plans Stable?

The most common reason for SPM implementation failure is that the compensation plans are in a state of flux, sometimes even changing while the implementation is in progress. Are your organization’s comp plans still going through significant changes because of evolving market landscapes? If so, you will have a tough time keeping your SPM implementation on track.

Taking this into consideration, you are not ready for an SPM tool. And yes, when you are told that the tool can handle all future changes without any time or effort, take it with a grain of salt.

4. Do you have enough Time?

From vendor demos to go-live, SPM projects will take no less than 4-5 months. If you are too close to the beginning of the new Plan Year and the deadline for Pay file is already in sight, you have probably missed your window of opportunity. If you decide to move forward at this point, you will be scrambling to move fast, thereby compromising the quality of your decisions, and creating a huge risk to the project overall. You are better off planning a mid-year rollout, which will have its own challenges, but at least you have time to plan for it.

5. Are Business Processes Mature?

When the organization is growing rapidly, HR and Finance are constantly tweaking the organizational framework. For this reason, or maybe due to a recent M&A, if the processes and policies in the organization have not yet been solidified, it is difficult for the implementation team to configure the new tool. A lot of time and effort would go to waste in changing the tool configuration again and again.

For example, if the new hire draw policy is changing every few months, the SPM tool can’t really be successful.

6. Do you have IT Systems providing Reliable Data?

SPM tools can’t operate in a vacuum. If you don’t have HR systems providing reliable Payee data or ERP systems providing sales data, you will have huge challenges with the SPM tool. Garbage in, garbage out. For instance, if new hire notices are coming to the commission administrator on Post Its, you are not ready for an SPM tool. You must first invest in HR tools and processes.

7. Is IT Leadership ready for one more Tool?

SPM implementation projects require IT budget and resources. If the IT team has resource constraints, or there is another large IT initiative, such as an ERP upgrade planned for the year, then IT will not be very happy about supporting an SPM implementation. A quick synch up with your IT leadership would help ensure that no such major roadblocks exist.

8. Is the Cloud an option?

Almost all major SPM tools are now available only as SaaS solutions, where the software is hosted in the vendor’s Cloud. What that means is, if your organization has a strong preference for On-Premise solutions, your choice of vendors becomes very limited.

It’s better to clarify with your business leaders if Cloud solutions are an acceptable option. If not, knowing the road map for all software vendors, you may want to abort the idea of packaged solutions or wait for your organization’s mindset to change.

9. Do you have Resources to support this Project?

After the tool is implemented, you may be able to cut the headcount in commission operations. But initially, you will have to dedicate a great deal of time and energy in evaluating and implementing the tool. If you are unable to free up any of your current resources and can’t find the budget to hire external consultants, it will be extremely challenging for you to get this to the finish line.

10. Is there an M&A on the Horizon?

Last but not least, if there is an M&A on the horizon, it’s better to wait on an implementation project. The new company may already have an SPM tool, and it is almost guaranteed that your business team will want a single SPM tool catering to the joint salesforce.

If you need further assistance with getting you prepared for an SPM project, please contact us at mktg@spectrumtek.com.

Corporate greed: is it driven by shareholder value, e.g. earnings per share, stock price, dividends in a public company, equity valuation in preparation for an IPO or selloff in a private company? Perhaps all of the above. Do senior executives, including sales leaders unknowingly contribute to this greed or is there a willful disregard of laws and regulations in pursuit of higher personal earnings & reward, i.e. incentives?

A case in point is Wells Fargo Bank and its Community Banking Division. Last week, the Consumer Financial Protection Bureau, working with the Office of the Comptroller of the Currency and the city of Los Angeles imposed a $185 million fine on Wells Fargo for defrauding customers in order to generate more revenue.

Much of that fraud took place in the retail banking and credit card units of the community banking division. According to Wells Fargo, over 5,300 employees were fired in the past 5 years for the unauthorized opening of accounts. These accounts were fraudulently opened in customer names in order to hit unrealistic sales goals. Astonishingly, it would appear that Wells Fargo was aware of this practice for five years, but did nothing to willfully stop it.

So what will be the fallout of this debacle? Loss of confidence in the consumer banking industry and likely, a new wave of regulations from DC. Whether or not future regulatory stipulations are enacted, SPM vendors should take note.

Would a Sales Performance Management tool have further enabled this activity or could SPM have prevented it? Regardless of the technology used or not used, it comes down to the people in charge who allowed this gaming of the system to occur.

Many questions still remain:

Where were the checks and balances in terms of variable pay to assignment allocations for the sellers and their managers?

How were the performance bonuses for sales management measured and who oversaw this?

Why weren’t alarm bells going off and red flags raised over the fact that 5,300 people were terminated over a 5-year period? No one thought to ask why?

How was the leadership team able to game the system?

Can SPM tools, with all their analytic capabilities, advanced workflow and communication features, be a solution to help prevent this from happening again? Or, is it just a sad reality that no matter what technology exists, simple human greed and despicable executive behavior will always triumph over the best of code and firewalls.

Back when I started my professional selling career over 35 years ago, the term sales performance management meant sitting though weekly sales meetings and performance reviews every 3 months. Sales performance management in those days had little to do with analyzing productivity, team performance, sales enablement or incentive compensation, except, if you weren’t performing, i.e. hitting your numbers, sales management took the keys to the company car in return for your last check.

24 Carat Gold Calculators

From the early to mid-90’s, sales compensation management software started to hit the market. There wasn’t much science or empirical data to drive business outcomes based on historical or regression analysis, just a more streamlined and efficient calculator of sales commissions. This software was sometimes referred to as a ‘24 carat calculator’ because of its overall cost relative to its utility. A lot of IT organizations began building rudimentary commission calculators and reporting tools more cheaply. In fact, my team worked with our IT folks at Textron Systems to build such a proprietary system in 1990 using Lotus Symphony (before IBM) on Unix / Sun Solaris.

From SCM to EIM to ICM and Now SPM…

Over the next decade or so, sales compensation management (SCM) as it became known, morphed into EIM or enterprise incentive management as finance looked to increase its focus, and control, over incentive spend relative to performance. Then, by the early to mid-2000’s, incentive compensation management (ICM) became a more common definition as incentive compensation management moved across lines of business to now include other forms of incentives, both cash and non-cash for sales and non-sales staff with varying degrees of reporting and workflow.

As the new millennium was nearing the end of its first decade, sales performance management (SPM) became the defining terminology. With advanced reporting and analytics, territory and quota planning, improved workflow and flexible user interfaces, SPM software was now the quintessential tool designed to align sales performance with company goals. Sales operations suddenly had a new face, with new responsibilities and for some, a seat at the table.

From a technology perspective, the adoption of the Cloud (SaaS) and advanced integration technologies made the economics more attractive. The newer generations of SPM software became technically superior over just a couple of years prior. For better or worse, functionality also became quite similar across vendor offerings making vendor selection even more challenging, at least visually.

SPM Software, The Devil’s in The Details and The Requirements

Today, there are nearly 30 software vendors, including the leading ERP vendors, that perform many of the common SPM functional attributes. Out of these 30 software vendors, fewer than 10 are considered to be best of breed SPM software vendors. Of these best of breed vendors, most can satisfy at least 70% to 80% of the typical functional requirements found in technically challenging RFP’s. However, any one vendor can fall short on reporting, analytics, workflow, territory & quota planning, data volumes, managing overly complex compensation plans – the list goes on.

This is why it is imperative for stakeholders to take ownership of defining, gathering and documenting requirements for their particular line of business. The most successful implementations of a SPM solution occur when line of business owners are directly involved from the onset, executive sponsorship is established and realistic project goals are set. SPM projects are like ERP projects in some ways; there are a lot of fingerprints touching various segments effecting a lot of people, the way they work and the financial impact to the company. SPM is not a compartmentalized nor a departmentalized tool.

Many SPM tools can also calculate bonuses, assign and measure MBO’s while enabling scorecard functionality, a core function for HR tools. But, they cannot perform many of the core workforce management functions such as salary administration, equity or stock distribution, deferred compensation and merit pay, together known as total compensation or total rewards. In addition, HCM tools provide a unified view across all employees that can analyze role-based performance, measure skill levels and prescribe best-fit candidates for a particular job and provide a holistic view of the total workforce.

If a top tier HCM or HRMS vendor were to acquire a top tier SPM vendor, or, the other way, around, then integrating the two successfully, while offering either as a stand-alone solution or together as one, that would be a market moving game changer. I’m surprised that hasn’t happened up to this point given the speculation and rumors that have circulated throughout the industry for years. I think further consolidation of the SPM market is inevitable, which can be a good thing.

About the Author: For more than 15 years, Tom Troiano has been a successful senior sales executive with the leading Sales Performance Management vendors including IBM / Varicent, Synygy (Now Optymyze), Callidus Cloud and Oracle. Throughout these years he has helped 100’s of companies across many industries evolve from spreadsheets and homegrown tools to today’s data driven SPM solutions supported by a strong business case. Tom has been in sales and sales management his entire career. Starting in 1980, where he led a sales team at a small startup that grew into a big sales team while designing his first sales compensation tools.

SPM operation, especially the Incentive Compensation part of it, is all about handling data. Poor data quality can significantly
drive up the operational costs and cause the sales team to lose faith in the calculations. Good data is essential to producing correct pay calculations and reports, allowing sales team to focus on delivering sales, rather than dealing with discrepancies.

But, having good clean data is not enough. SPM operations are time sensitive, and the data across various underlying systems is every changing. Hence proper data synchronization (across business and IT systems) is important as well. Different Reporting Cycles, Payroll Cutoffs, and Period specific Adjustments can’t be handled accurately, until data is clean, and well synchronized.

The following check list will help guide the decisions to deliver consistent and accurate data to the SPM system:

1. Choose the data source carefully

Companies that have a single source for revenue and customer sales data are more likely to have good data quality, thus generating the most accurate reports. Data quality suffers when companies have multiple production systems and data repositories that are managed by multiple teams. If these systems and repositories are not in sync because of different adjustment and reconciliation processes, the data quality will be poor. To insure integrity of the SMP reports, these companies must design requirements that sync up the various data sources and utilize the same data that is used for all other company reports.

2. Consider full data loads vs. incremental transactions

Based on the cost and time it takes to process sales transactions, the most common transaction loads are incremental. Because companies make periodic payments to Sales, the SPM data must be date-stamped and stored. This insures that future transactions do not alter or compromise the historical values previously used for pay calculations. Many core business systems provide the infrastructure to load incremental data without compromising the historical data. Companies with known data issues however, may resort to full YTD data loads prior to the close of each pay period. Still others still, design compensation calculations that factor the YTD data changes into the current pay period.

Companies should decide on the type of data load best suited for them, based on factors impacting their sales crediting policies such as, type of business, number of transactions, and volume of revenue adjustments.

3.Determine the impact of adjustment transaction

Adjusting sales results involves different types of transactions, including contract revisions, cancellations, discounts, claims, and pricing revisions. Three important principles should be followed to ensure good SPM data quality:

SPM data should be loaded in sync with adjustments posted in the core systems and those posted to management reporting systems

Do not attempt duplicate postings of core data adjustments directly into the SPM data loads. This could be a costly move.

Create a separate category for “SPM Only” Pay For Performance adjustments (small volume critical pay adjustments) that can be posted within a specific pay period for correcting payouts. By year end all final adjustments will be posted to the core systems and these SPM adjustments will show a net of zero.

Even the best designed data acquisition and validation processes need to be reconciled with the core system before pay calculations are executed. This is easily done by reconciling the SPM data loads with core system results during the period-ending data load process. Make sure that the revenue and other key metric values are reconciled to the same reporting periods, so that SPM calculations are in sync with other business systems.

5. Provide an easy way to create reports and data files for sales and support teams

Add customized reports and data extracting options, specifically designed as inquiry tools, to the SPM system. This will enable Sales Support and others to easily create reports whenever needed.

6. Retain “locked” multiyear data available for SPM analytics

The ‘locking’ functionality in many SPM systems allows access to detailed, multiyear performance data and provides a major advantage when producing sales team compensation analytics, internal pay plan performance trends, and business performance metrics.

In summary, the first priority in the development of a SPM Pay and Performance reporting process is to design requirements that will produce superior data quality. This includes dictating that the SPM data is in sync with your company’s sales results reporting and business metrics. Poor data quality will lead to a lack of confidence in the SPM system and Operations team, creating unease and discontent among your Sales team.

Managing sales compensation programs takes planning; focus and a daily drive towards the organizations sales performance management objectives. To discuss this further feel free to email us at info@spectrumbiztech.com.

About the Author: George O’Connell has on premise and SaaS expertise in the area of Sales Performance Management (SPM) and Incentive Compensation Management (ICM). His experience includes design, development, operations, governance, and analytics for a company with $2.5 billion in sales to over 500,000 customers. He’s managed SPM operations for a wide range of sales channels including telephone sales, sales executive channels, union contracts, new business start-ups, call centers, third party vendors, sales management plans, and director / sales VP compensation.

I have observed a wide range of organizational structures for Sales Performance Management (SPM) operations. Compared to any other organizational operation, SPM operations are somewhat an oddball because there is no single department in the organization that is a natural fit to take full ownership. Roles and responsibilities are often undefined and spread across multiple functional groups. There isn’t a standard best demonstrated structure that fits all businesses. The SPM operational responsibilities are by and large split evenly between the HR, Finance, and Sales Operations teams.

To ensure the most effective practices, the organizational responsibilities should be assigned to the most qualified, and experienced resources available in the organization. Anticipated business changes, in addition to the existing workload, should be a factor in deciding how to build SPM organization.

If, at any given time, a particular department needs to focus their attention on other critical business issues, they should be excused from SPM’s operational responsibilities. For example, HR may be dealing with high turnover, core HR system installations, or a lack of experienced resources needed to manage programming staff. Likewise, Finance and Sales Management, and Sales Operations will have their own specific challenges. In fact, Sales Operations may be viewed as too closely controlled by Sales Management to be appropriate gate keepers for commissions and bonus payments. Nevertheless, each one of the organizational options can be designed with all the appropriate management controls.

The right resources in any one of the three departments can produce excellent SPM operations results. For most companies, an evaluation of current talent and performance is needed to select the team with the highest probability for success. Once the dedicated SPM operations group has been selected, it can function successfully under the guidance of any one of the three departments.

The following three steps will help guide a company through the organizational set up:

SPM Advisory Board

The company should setup an SPM advisory board to oversee and approve changes to compensation plans and processes. The approval process will involve many aspects, such as legal issues, HR compensation policy, cost analytics, strategic financial decisions, sales management objectives, systems capacity, security, performance issues, etc. The senior advisory board should be the governing body that makes the final decisions for all SPM related projects and investments. A well functioning board will give the SPM operations team clear and timely direction so they can deliver effectively on companywide pay for performance objectives.

The senior leadership group should be comprised of representatives from HR, Finance, Legal, Sales Management, and Technology. Once the most qualified department is selected for direct SPM responsibilities, the board should monitor the performance of the dedicated team responsible for all SPM operations. The most senior SPM manager should have a seat at the advisory board meetings.

RACI Chart

Once the SPM organization is formed, the detailed responsibilities and scheduled interaction with the advisory board should be documented. Every company should put together a RACI chart to outline various functions involved in SPM and clearly define responsibilities and ownerships around these. Sample RACI Chart can be downloaded here. The best SPM organizations have “end to end” process responsibilities–from data capture, vendor management, SPM system design, plan development, pay calculations, testing, and reporting, to on-going support. Effective management of these end to end processes insures that the SPM team delivers accurate and timely results critical to maintaining excellence in sales performance.

Another important role of the SPM team is to keep the advisory board apprised of systems development, data or calculation issues, company sales payout trends, resource requirements, and all other operational factors impacting pay plans, projects, and cost.

Flexible Staffing Model

SPM operations usually require close interaction with the company’s IT organization, HR payroll staff, Financial Planning, Sales Management, New Product Marketing, and Legal departments. Due to the quick turnaround requirements, and the impact of revised or new annual compensation plans, SPM is best managed with a flexible resource pool.

Incremental resources from other departments, vendors, or outside consulting firms are frequently required to meet project deadlines. It is unlikely that a cost effective Sales Operations team can deliver a new compensation plan within 60 to 90 days using only in-house staff and management. SPM organizational resource needs are fluid, project based, and sometimes seasonal. The quality and timeliness of the incremental resources are often critical to the success of delivering pay for performance responsibilities.

In summary, org structure for SPM operations is unique for every company. An SPM advisory board can provide guidance and decisiveness. A RACI chart helps clarifying who does what, and creating a flexible staffing model will ensure an effective SPM operation.

About the Author: George O’Connell has on premise and SaaS expertise in the area of Sales Performance Management (SPM) and Incentive Compensation Management (ICM). His experience includes design, development, operations, governance, and analytics for a company with $2.5 billion in sales to over 500,000 customers. He has managed SPM operations for a wide range of sales channels including telephone sales, sales executive channels, union contracts, new business start-ups, call centers, third party vendors, sales management plans, and director / sales VP compensation.

Over the past few months I’ve heard that statement and similar sentiments from at least four companies. All were using Gartner defined Sales Performance Management (SPM) “Leaders” ) yet all believed their SPM system was failing them. The companies complained about the lack of flexibility to adapt to their changes and some were moving to manual processes to get commission calculated.

Speaking further with these companies highlighted the same core issue at each firm and it had very little to do with their SPM technology and everything to do with their staffing decisions. For instance, one of these companies had been successfully operating their sales compensation system for over three years. Three years of success and then the onlytrained person to maintain and operate the system left the company. Then, much to the company’s surprise, everything came to a screeching halt. The company blamed the software for not being flexible enough and set off to find a new system.

While it’s easier to blame a vendor than to accept responsibility, this company was operating with a naïve assumption that anyone could step in at any time and keep the system running. IC systems are complex and require the proper staffing, training, and maintenance to keep them operating smoothly. Single points of failure are never safe (would you fly with only one pilot?). Maybe it was the original sales pitch that told them how easy things would be that led them to this point? Maybe it was a short term situation that turned into a long term situation? Regardless, if you want to minimize your risk of a service disruption and make proper use of your SPM solutions, take the following steps.

1. Document
You must maintain some minimum level of documentation. In the case cited above, there was nothing in writing – it was all in the head of the one user. Start with a simple ‘run book’ that documents the major steps in your commission cycle (i.e., data loading, calculations, QC steps, outputs) as well as a Data Flow Diagram. Each cycle, make note of special cases and exceptions and use the history of multiple cycles to guide you to process improvements.

2. Staff Appropriately and Cross-train
It’s important to have skilled people (more than one) supporting your IC system. Companies all too often fail to appreciate what it takes to manage an SPM system well – trusting too much in the tool’s much advertised flexibility. Companies that do this well, acknowledge that this is a specialized skill set and requires people who are adept at managing multiple constituencies and who are able to translate requirements to produce deliverables. Be sure to anticipate and address peak staffing needs as well by cross-training beyond your core support team (for example, you can have the person who is responsible for quota maintenance also learn your ICM system).

3. Stay Current
SPM/ICM vendors are constantly rolling out new features. Pay attention to those and proactively work to incorporate those into your configuration. That means staying on (or near) the latest version of the software as well as investing in training – both base-level training to new staff and advanced training to more tenured staff. Join and participate in local user group meetings and attend the vendor’s national conference (i.e., Callidus’s C3 and IBM’s Vision) each year.

4. Archive Old Components
Be sure to allow for time to archive and remove unused components (rules, data, reports, etc.) from your system to keep as clean as possible. Doing so extends the overall life of your incentive compensation system, keeps the processing speeds faster, and allows for faster configuration changes.

In summary, managing sales compensation programs takes considerable focus and proper staffing. Recognizing and addressing this is critical to its successful operation. To discuss this further feel free to email us at info@spectrumbiztech.com or call us at (408) 813-1443.

About the Author:Dan Ganse has 20 years of deep expertise in the area of Sales Performance Management (SPM) and Incentive Compensation Management (ICM). His experience includes assisting customers in all aspects of enterprise-wide incentive management and brings a unique combination of business and technology expertise to address customers’ incentive management issues.

2015 is nearly upon us and many of you are preparing to roll out new sales compensation plans and supporting documentation. How do you ensure that your plan document has all the right ingredients and is communicated to the sales reps in the best way? Here are a few tips you may find useful.

Distribute the Plan Document Early
It is critical distribute the plan documentation as close as possible to the start of the plan year, preferably within the first week of the new plan year. At least two states – California (AB 1396) and New York (Section 191 of the Labor Law) – require that employees who are paid on commission must be provided a written contract which sets forth the method by which the commission shall be computed and paid. These laws further require that the employer provide a signed copy of the commission agreement to the employee and obtain a signed receipt for it. Delaying indefinitely (or skipping) formal documentation is no longer simply a bad business practice but put you on the wrong side of the law. Do whatever you can to get your plans out on time.

Setup Webinars
Often, major changes are incorporated in the new sales plan and simply pushing the document to the sales reps is not enough. If there are significant changes to the design, setup webinars with the reps and walk them through the plan components. Give them a platform to ask questions and clarify; their questions may even give you important inputs to make suitable changes to the document.

Provide Clear Guidance on How to Sign the Document
Many systems allow you to capture an electronic signature. However, sales reps often plead ignorance about this when clear instructions are not provided. Focus on a couple of things here: First, provide a clear guidance on the signature process. Second, clearly indicate the due date and send reminder emails couple of days before the due date. Send follow up emails to those who miss the deadline and copy their direct manager. And consider what some companies do – withhold commission payments until you have a signature on file.

Make Your Plan Document Lean and Precise
We often see plan documents that are too bulky which make them tedious to read and hard to follow. Most of the bulk comes from the Terms & Conditions of the compensation policy. Focus the document on the plan components and corresponding business objectives and make the Terms & Conditions as a common appendix.

Consider Adding a Clause About Windfall Payments
You may periodically experience a windfall sale – a large sale that the selling rep didn’t have much influence over. This often translates to a large, singular payment of two to five times the annual target commission target. Instead of simply paying this out, consider the safeguard action of having a windfall clause in your plan like “Under extraordinary circumstances, the company has the right to adjust the total commission payment based on a common sense business approach.”

Use Charts and Graphs for Visual Appeal
The compensation plan document can be a great motivational tool. If you include graphs and charts which creates an imagery of how compensation figures grows when attainment levels rise, it attracts your sales reps attention immediately. A picture paints a thousand words!

Communicate Linked Components Clearly and Concisely
Some plans will link the payment of one component with the performance of another component. For example, a sales rep could carry both a product and a service quota. Companies that link components don’t want a rep to be satisfied with payment on a single component at the expense of the other. Typically these plans work in such a way that the rep does not get a product accelerator unless he also meets the service quota (or vice versa). Numeric examples should be used to help the rep understand their compensation under various scenarios. Each scenario can depict a service-product quota break up and projected earnings.

Cover a Single Position or a Role
There can be situations where an individual has carried out the responsibilities of two roles for a limited period of time. For example, take the case of a manager who has filled in for a sales rep who has quit the company. For such cases, do not create a new plan. The individual should be assigned two separate plans for each position or handled as an exception and with senior management approval.

Now that you are ready to go out with your plan, one last thing!

Make sure the plan document is reviewed and blessed by all stakeholders (i.e., HR, Legal, Sales, Finance) before you communicate to your sales reps. The last thing you want is to make yet more changes to the plan document after the rollout.

The Mayflower’s voyage was a test of will and survival. The pilgrims had sold nearly all their possessions and worked hard to pay for their passage. The voyage was a stormy and unpleasant one with many of the passengers so seasick they could scarcely get up. After more than two miserable months on the Atlantic Ocean, the band of 102 people finally managed to reach the New World.

The colonists spent the first winter, which only 53 passengers and half the crew survived, living onboard the Mayflower. Once they moved ashore, the colonists faced even more challenges. During their first winter in America, more than half of the Plymouth colonists died from malnutrition, disease and exposure to the harsh New England weather. Without the help of the area’s native people, it is likely that none of the colonists would have survived. An English-speaking Pawtuxet named Samoset helped the colonists form an alliance with the local Wampanoags, who taught them how to hunt, forge, and grow local crops. At the end of the next summer, the Plymouth colonists celebrated their first successful harvest with a three-day festival of thanksgiving. We still commemorate this feast today.

Sales Performance Management professionals can learn a few lessons from the way the pilgrims battled the odds and demonstrated their survival instincts. We listed some of them below:

1. Have faith in your purpose
The pilgrims were known for their unwavering conviction of reaching their destination. They had a strong purpose to settle and had full faith in their belief in God and confidence in themselves to survive the testing ordeals.

From an SPM professional’s standpoint, having a clear goal or purpose is crucial for sustaining your performance. You should clearly understand how your role in sales operations enriches the effectiveness of the salesforce and how the belief in your own contribution supports and drives the strategic goals of the entire organization.

2. Practice Discipline
The Pilgrims demonstrated an example of disciplined living, not only by completing the long and difficult voyage but also the way they had survived in a new and completely unknown geography by being adaptable and flexible. Their ethic of self-mastery and discipline is a learning deck for SPM professionals.

An SPM professional’s job has multiple facets. You cannot afford to lose sight of one at the expense of another. You must constantly work towards making the salesforce more productive. You work on providing better analysis to help them make better and faster decisions, shortening the sales cycles, increasing the sales frequency, and increasing sales deal size.

It’s about understanding your role, committing to the process and delivery schedule, understand how you fit into your role, communicating with the key stakeholders, letting them understand and appreciate your role, and taking proactive steps rather than just let wait for people to come and ask for things.

The practice of discipline to drive salesforce efficiency with flexibility and adjust processes to meet business demands is the hallmark of your success.

3. Care About Others
The Pilgrims had social concern. They lived with locals who looked different than then did and had a different religion and culture. They knew that they were citizens of another world, but they sought to improve the world they were passing through. The Pilgrims made their new world better, not by tearing down the old, but by constructive work and fair dealings with their new neighbors.

In an SPM professional’s world, there are multiple stakeholders like Sales, Finance, Human Resources, Legal and IT involved in a sales incentive plan. You cannot adapt a reckless approach to deal with all these stakeholders. You need to be politically savvy to interface with them while maintaining the focus on supporting the sales organization.

In addition to the internal stakeholders, pay attention to your external ‘customers’ – the salesforce itself. Understand how business conditions and natural disasters can affect them. For instance, when Hurricane Katrina struck in 2005, many of the leading sales organizations adapted to the situation to give quota relief to their salesforces. Remember, your salesforce is your customer. Be compassionate and flexible. Make exceptions to the rules at the right times and for the right reasons to make your sales team function better.

4. Dream Great Dreams
The Pilgrims dreamed great dreams. They dreamed of a haven for themselves and for their children. The Pilgrims’ strength of spirit was forged by a strong faith in God, tough discipline, a foresight, and by regular habits of winning against odds.

As an SPM professional, do not lose yourself in your regular daily activities. Take a holistic approach and look at your function as the binding key between the corporate business goals and sales execution. Put on your system thinking cap to build structured processes around quota setting, territory alignments, sales compensation management et al, not for the sole purpose of moving up the value chain as an individual contributor. You are here to help the entire corporation in achieving its mission. Think big!

5. Triumph of survival instinct
The pilgrims exhibited tremendous fighting instincts during the voyage. After battling the storms and sea sickness for more than two months, when they finally reached the Plymouth Rock, they had no home or food. It was winter, and most of them were too weak, cold and hungry, to survive. However, they had the indomitable spirit and mental toughness to survive the trying conditions.

SPM systems have their own storms and trying conditions – they face frequent data disruptions and continuous changes in strategies and internal IT systems. There are numerous dependencies and external factors that can very quickly bring in significant changes to business processes, incentive plans, and resource availability. This is the reality of your job.

In spite of these difficulties you have to be able to adapt and guide the processes and procedures to support an organizational goal – to make your salesforce succeed in the field. It may be cliché but “change is the only constant factor.” You cannot do much to stop or avoid the changes, but you can accept the changes and adapt your systems and processes to adjust to those changes.

Be tough and let your survival instinct come to the forefront. You will always triumph at the end!

You have done the hard work with internal assessments of your sales performance management needs distributing RFIs and RFPs. Now you are getting vendors to come in for sales talks, and you better be prepared to ask them the tough questions.

Spectrum and its consultants have worked with well over 100 firms deploying SPM systems and based on our experiences, we have assimilated some key questions that will help you in the final selection process.

The questions fall under three categories – product features, pricing, and support.

1) Product Features

Basic feature evaluation is covered by most teams. Here are some of the important but often ignored areas to question the vendors:

SaaS versus On-Premise – If vendors offer both on-premise and SaaS deployments, understand if the vendor has a clear preference. In case of many vendors, only the SaaS product is being actively managed and upgraded.

Data Integration – Does the SPM product have a built-in ETL tool or does it rely upon other external ETL tools? Some SPM products include this while others do not. Typically if they’re included your end users can do more ‘heavier lifting’ within the product.

Reporting – You should understand what it takes to build new reports. This task is easier in some tools than others. Are there any out-of-the-box reports available? Are they useful for your organization?

Workflow – Another important question to ask your vendors is about the workflow possibilities. Ask the vendor if the software handles disputes, territory alignments, quotas (setting, communication, approval, and/or relief). Can the system generate email and other types of alerts?

Mobile Use – Look at how the end user experience is on mobile devices, especially for sales reps. How easily is that experience supported (heavy and specific mobile configuration efforts or part of general definition that then translate well to mobile)? Understand if the vendor has an app that they use or if this is done via web browser.

2) Pricing

Your vendors may provide you a range of pricing models. You have to spend some time to understand the pricing parameters of the contract and understand what may increase the prices. If it is SaaS model bid, you have to size up the hardware and build out databases. If the actual data used is much more than planned, you will end up paying more (sometimes a lot more) money to the vendor. Ask questions to understand the storage variables and how sensitive this is.

Most companies also base pricing on payee or overall user counts. Get your vendors to provide the incremental cost if your users increase as well as saving if your user counts fall.

Be sure to ask about the pricing after the initial term and seek a rate hike cap on the future pricing. Check if there is an early termination fee, and if so, seek to eliminate or negotiate this fee lower.

For implementation fees, you may have fixed bid contracts on the table which come with a set of fixed assumptions. Often these assumptions are broad enough that they leave your implementation vendor plenty of leeway to seek additional fees. Pay attention to these assumptions and seek to clarify them so you really understand the implementation parameters of your project.

3) Support

Be sure to clarify the ongoing support model with your vendor – what’s available for purchase and what you are in fact purchasing.

You want to first make sure your vendor provides a helpdesk and/or web support and then look for a service level agreement (SLA) on response times for fixing bugs and addressing product defects. Understand what self-help tools are available (i.e., online help, knowledge bases, user community, etc) and work to gauge their level of helpfulness (some are not actively managed and are more to simply say a YES on RFP responses).

Most vendors provide product support but not configuration support. You need to understand whether the support is a skill you want to build and maintain in-house or if you prefer to use outside assistance. If you want outside help, some of the software vendors provide this as an optional service as do specialized 3rd party SPM/ICM service providers, including Spectrum Technologies.

Last but not the least don’t limit your reference checks to customers provided by the vendor. Use your network to find out more customer references independently to gather as much information as possible to guide your decision.

Good luck with your upcoming vendor evaluation! To discuss this further feel free to email us at info@spectrumbiztech.com.com or call us at (408)-813-1443.

Sales Performance Management (SPM) projects are complex and most don’t complete on time or within budget. As a specialized SPM services firm, Spectrum has worked on numerous SPM implementations with a variety of technologies. The following our five of the top reasons why SPM implementations run into issues and our take on what can be done to mitigate those risks.

# 1 – Lack of Executive Sponsorship

SPM projects involve participation from multiple business functions like Sales, Finance, HR, Legal et al. There is always a possibility of participants losing momentum on project tasks, as they also need to focus on other regular job. The presence of a senior leader as an Executive Sponsor of the SPM project, who everyone looks up to for directions and guidance, helps in keeping the focus of the team on the project priorities.

Decision making in a multi-dimensional team comprised of mid-level managers is a challenge. The project runs into time pressure frequently. The executive sponsor understands the success factors and constraints too well. With the authority to take quick decisions, he helps aligning the team to his directives and ensures that timelines are met.

# 2 – Poor Project Governance Model

Since multiple functional departments have participants in the project, involving all the stakeholders throughout the life cycle of the project is an absolute necessity. A consistent, proactive and methodical communication platform ensures that the all the stakeholders are well informed of all the elements of the system that are being impacted during the project. It is important to form the steering committee very early in the project that lays down a simple and transparent project governance model, identified the dependencies and risks in the project, establish a versatile project plan involving all stakeholder participation and a sound communication platform that keeps the directives clear.

# 3 – External Dependencies

SPM projects impact multiple functions such as Sales, Finance, Legal, HR, IT etc, and at the same time get impacted by multiple functions. This puts SPM projects at high risk, especially the projects with long project timelines.

Several external factors like – a new executive, launch of a new product line, an M&A announcement, economic downturn or legal lawsuits, can very quickly bring in significant changes to business processes, incentive plans and resource availability. The new VP of Sales walks in with new visionary ideas that put the in-flight project back to design phase! An enhancement applied to ERP system breaks the data interface and so on.

It is important to realize that SPM projects are not happening in silo. There are lots of dependencies! While it is impossible to predict the unforeseen, one has to put in a conscious effort to look beyond the horizon and anticipate the factors that may impact the project. If there are too many changes expected in the near term, you should consider pushing out the project kick off.

# 4 – Poor Resource Planning

Operational and project responsibilities are different, and it makes sense to keep them separate.

Can the driver of the car also be made responsible for engine tune up? Yeah, maybe, but generally you wouldn’t expect one person to take on the dual role. However, in SPM projects, we often see the commission operations team carrying on the added responsibilities for supporting the new project, especially testing. This leads to severe operational conflict with project tasks.

Like any other complex projects, different specialists are needed to be assigned to specific roles. Bigger the project, greater will be the resource needs. If it is so deemed that operational team has to be the one doing testing as well, then one has to plan for the month/quarter ends, when operational team would have no bandwidth for the project. Don’t assume 100% availability.

Planning of vendor resources is also important. I have seen projects where multiple vendor resources are on-boarded on the project kick off, even though the ground work of the project is not yet completed! It’s like getting construction workers on the ground when the floor plan is not even approved. This burns a lot of money over idle vendor resources causing budget crunch for later phases of the project.

# 5 – Testing Approach

Most popular testing approaches are – Parallel Run and Test Case based testing. Most often there is not much thought given to which approach is best suited for the project.

Parallel Run approach requires running the legacy (or current) system in parallel with the new (or enhanced) system, and comparing the results for a quarter or two. This approach does not work, if there are significant changes in the plan design and expected results. I have seen testing resources working arduously to identify and explain the gaps between the two systems. If the new plan design is very different, or the old system has lots of known issues, then why waste time in doing reconciliation! In such a situation, test case based approach is more suitable. However, building numerous test cases, test data, and expected results, is a time and effort intensive approach.

One needs to evaluate the two options, and take a conscious decision on which testing approach is most suited. Very often a hybrid approach works much better. Compare the results with the old system where there are no changes, and build exhaustive test cases for some selected modules.

About this Blog’s AuthorManeesh Gupta is the founder and Managing Partner at Spectrum Technologies. Spectrum is a Silicon Valley firm providing specialized services in the area of Sales Performance Management Systems since 2006. Maneesh can be reached at mgupta@spectrumbiztech.com

About Spectrum Technologies

Spectrum is a technology and business consulting firm offering specialized services in the area of Sales Performance Management (SPM) and Incentive Compensation Management (ICM). We help our customers both in end-to-end holistic SPM solutions and in specific tactical areas like Quota Management, Territory Management, Reporting/Data/Business analytics and Configuration/Price/Quote (CPQ).